The NLRB Hits Just Keep Coming. This Time, Possible Front-Pay

There seems to be no slowing to the NLRB’s unusually high recent activity. As we have written in recent weeks, the Board has recently changed direction with respect to employers handing over witness statements, has asserted that employers are now responsible for extra taxes on back-pay awards, and must now continue dues check following expiration of a collective bargaining agreement. On January 9, 2013, breaking from a long-standing policy, NLRB Acting General Counsel Lafe E. Solomon recently issued a Memorandum (Memorandum GC 13-2) announcing that front-pay may start to be included in agency settlements. Previously, payments exceeding 100 percent of back-pay were to be set out by private parties in separate agreements. As a result of the change in policy, the NLRB’s Compliance Casehandling Manual, which currently requires that settlement terms that include items such as front-pay be set forth in non-Board “side letters,” will be amended to include front-pay in agency settlements.

The decision to include front-pay in agency settlements reflects what the Board describes as the reality that “a significant number of settlements” approved in recent years include payments to employees at greater than 100 percent of back-pay even though the National Labor Relations Act does not explicitly provide for front-pay as a remedy. However, Mr. Solomon observed that remedies the NLRB may approve as part of a voluntary settlement agreement between the parties are not limited to those that the NLRB would seek in formal proceedings and that utilizing front-pay as a remedy has been well recognized by the courts. Though not specifically acknowledged in the writing, the memorandum suggests that settlement discussions may have an enhanced focus on front-pay issues, but now with some official Board endorsement potentially behind such focus.

The memorandum also revised other sections of the Compliance Casehandling Manual to mandate that any settlement that includes a waiver of reinstatement rights must be in writing and placed in the case file. This overrides the portion of Operations-Management Memorandum 11-61, issued by the NLRB on June 3, 2011, which eliminates the requirement that a waiver of reinstatement rights be in writing.

While Mr. Solomon’s memorandum makes clear that the NLRB’s policy continues to favor reinstatement as the preferred means to resolve unfair labor practices, the policy also recognizes that employees may decide to waive reinstatement in return for compensation and that the Board will put its official stamp of approval on such settlements. The memorandum also clarifies that it is in line with the NLRB’s policy of favoring Board settlements rather than discouraging them.